Discontinued Operations

12 Months Ended

Dec. 31, 2024

Discontinued Operations and Disposal Groups [Abstract]

On August 1, 2023, the Company entered into the Offer Letter with Evergreen Hill Enterprise pursuant to which Evergreen Hill Enterprise made the Offer to acquire the Company’s EP Business for $620.0 million in cash, subject

to customary closing date adjustments. Upon entering into the Engineered Papers Offer agreement, the Engineered Papers business met the criteria set forth in Accounting Standards Codification 205-20, Presentation of Financial Statements – Discontinued Operations (“ASC 205-20”), as the sale represented a strategic shift that had a major effect on the Company’s operations and financial results. As a result, the Company’s consolidated financial statements for all periods presented reflect the Engineered Papers business as a discontinued operation.

On November 30, 2023 the Company completed the sale of its Engineered Papers business. Upon closing of the transaction, the Company recorded a gain on sale of $176.3 million ($170.0 million, net of income taxes) and released certain material deferred tax valuation allowances. The gain and cash proceeds are subject to customary working capital adjustments during a specified period following the sale close date.

The Engineered Papers business was tested for recoverability as of each balance sheet date since meeting the discontinued operations criteria and the Company concluded that there is no impairment expense to be recognized.

Summary financial results of discontinued operations were as follows (in millions):


	Years Ended December 31,
	2023		2022
Net sales	$	490.9	$	530.5
Cost of products sold	373.4		398.9
Gross profit	117.5		131.6

Selling and general expense	29.4		32.0
Research and development expense	8.6		7.8
Intangible asset amortization expense	—		—
Total nonmanufacturing expenses	38.0		39.8

Restructuring and other impairment expense	0.5		0.2
Operating profit	79.0		91.6
Interest expense (1)	49.0		28.8
Other income, net	194.8		9.3
Income from discontinued operations before income taxes	224.8		72.1
Income tax expense	29.1		15.0
Income from equity affiliates, net of income taxes	2.5		5.2
Income from discontinued operations, net of tax	$	198.2	$	62.3

(1) Upon the close of the transaction, the Company used a portion of the net proceeds to repay a portion of its outstanding debt amounting to approximately $641.2 million. This debt repayment is based on the triggering of a financial covenant in the loan agreement and interest expense has been allocated to discontinued operations on a pro-rata basis within the Consolidated Statements of Income (Loss) and the Consolidated Statement of Cash Flows based on the outstanding loan balances.